The economy has become largely globalized and digitalized in recent decades with these trends, and it doesn't look like these trends will change anytime soon.
Increased globalization doesn’t come without some challenges.
However, it’s also been a great tailwind for online sellers to fuel business growth.
Because ecommerce stores operate online and are not limited to a specific geographic location, their total addressable markets are much larger than they would have been on a local level alone.
Thus, if you want to grow your business by expanding into new markets, continue reading as we explain why this may be a worthwhile investment for your brand and how to do so successfully.
Let’s dive in!
Expanding business globally offers significant growth potential for online sellers, allowing them to reach a more extensive customer base and increase earnings.
However, the success of such expansion depends on available resources and tools.
Let’s look at some common pathways toward global expansion into new markets.
Online sellers may recognize notable traffic to their site from other countries or regions,
This may occur for several reasons, so it's worth investigating further to see if it has long-term potential and provides a reason to enter the new market to take advantage of the demand.
To better understand the value of interconnectedness, check out this diagram that shows the global ecommerce sales growth from 2017-2023.
Assume an online clothing store in the United States primarily serves customers from that country.
However, the store began noticing a significant traffic increase from various European countries, including Germany, France, and the United Kingdom.
They observe this traffic spike over a specific period and notice certain patterns that indicate significant international interest.
Here are a few reasons that could explain this phenomenon:
✔️ Social media exposure – The online clothing store experienced a sudden surge in popularity on social media, possibly because of a viral post or endorsement from an influencer. People from various countries shared and talked about the store's products, resulting in a higher number of visitors from those regions.
✔️ International marketing campaigns – The store might have launched targeted advertising campaigns in specific regions or countries.
As a result, it increased visibility and attracted customers from those locations.
These campaigns could include localized advertisements, partnerships with regional influencers, or collaborations with international fashion blogs.
✔️ Word-of-mouth recommendations - Satisfied customers from different countries might have recommended the online store to their friends and family, creating a ripple effect.
Positive reviews and experiences shared through word-of-mouth or online forums can significantly impact traffic from specific regions.
✔️ Search engine optimization (SEO) - The online store may have implemented effective SEO strategies that resulted in higher visibility on search engines for specific keywords or phrases commonly used by international customers.
This increased visibility can lead to a surge in organic traffic from different regions.
✔️ Global shipping options - The online store might have expanded its shipping options to include international delivery.
By offering affordable and reliable shipping services to various countries, they make their products more accessible to customers outside the United States, thereby attracting international traffic.
Ecommerce brands may make their first globalization efforts into nearby regions and markets that share logistics or entry points (U.S./Canada, EU countries).
This physical proximity gives the new markets low barriers to entry.
Consider a well-known online furniture retailer based in the United States that has had significant success in the domestic market.
To begin international expansion, the company focuses its initial globalization efforts on nearby regions and markets that share logistics or entry points, namely Canada.
✔️ Shared logistics infrastructure - United States and Canada share a border, making transportation and logistics easier between the two countries.
Taking advantage of this proximity, the company can optimize its supply chain and delivery networks to serve customers in both regions efficiently.
This shared logistics infrastructure reduces shipping costs, transit times, and potential customs and duty complexities.
✔️ Cultural similarity and market familiarity - Language, consumer preferences, and lifestyle patterns are among the cultural similarities the United States and Canada share.
By entering a market with some familiarity, the brand can avoid some of the challenges of entering completely new and unfamiliar territory.
✔️ Established trade agreements - The United States and Canada have a longstanding trade relationship, supported by agreements like the North American Free Trade Agreement (NAFTA) and its successor, the United States-Mexico-Canada Agreement (USMCA).
These agreements provide a framework for reduced trade barriers, streamlined customs procedures, and simplified regulations.
✔️ Similar consumer behavior and purchasing power - Consumer behavior and purchasing power in the United States and Canada are relatively similar.
Because of this, the brand can leverage its existing market knowledge and insights while making necessary adjustments to accommodate local preferences.
✔️ Scalability and growth potential - By entering the Canadian market, the online furniture retailer will be able to reach a new customer base and achieve scalability.
Canada has a large market size and presents opportunities for the brand to increase its sales and revenue.
Brands may have an easier time expanding into markets that share languages or cultural values (U.S./Canada/U.K./Australia).
There may also be cultural tailwinds in global markets that make it easier to introduce new products to foreign countries.
Let's take a look at a well-known cosmetics company with headquarters in the US that has a sizable domestic market share.
In order to grow internationally, the brand chooses to concentrate on countries like the US, Canada, the UK, and Australia that have similar linguistic and cultural norms.
✔️ Shared language - English is the primary language spoken in the United States, Canada, the United Kingdom, and Australia.
This shared language simplifies the localization process and allows for seamless communication with customers.
✔️ Cultural alignment - The United States, Canada, the United Kingdom, and Australia share many cultural values, trends, and beauty standards.
These similarities make it easier to adapt its product offerings, branding, and marketing strategies to resonate with consumers in these markets.
✔️ Influencer collaborations - The cosmetic brand can leverage the influencer marketing ecosystem by collaborating with local influencers in each market.
These influencers can help generate brand awareness, showcase products, and provide authentic endorsements to their respective audiences, further strengthening the brand's expansion efforts.
✔️ E-commerce infrastructure - The e-commerce infrastructures of the United States, Canada, the United Kingdom, and Australia are well-developed and include trustworthy payment gateways, logistics companies, and online marketplaces.
As a result, operations become simpler and customers have a better overall experience.
Ecommerce stores that rely on wholesale partnerships can gain insights into what markets are hot at any given time.
This includes pricing guidance, messaging, and other insights that can be helpful while launching in a new market.
Consider an online retailer of electronics that purchases its goods from a number of wholesalers.
The retailer already has a strong following in its home country, but it wants to grow abroad.
They work closely with their wholesale partners to gain knowledge of trending markets and to plan a successful launch.
✔️ Pricing guidance – The wholesale partners have access to market data and trends, allowing them to provide valuable insights on pricing strategies that work well in various regions.
This guidance helps the ecommerce store set competitive prices that align with the market expectations and purchasing power of customers in the target market.
✔️ Market demand and trends – They can provide data on which product categories are currently popular, what features are highly sought after, or any unique market preferences that could influence the retailer's product selection and marketing strategies.
✔️ Customer preferences and messaging - Wholesale partners can offer insights into customer preferences, cultural nuances, and effective messaging that resonates with the target audience in specific markets.
✔️ Inventory selection - They can assist the ecommerce store in selecting the right inventory for the target market.
They can analyze market trends, customer demand, and competitor analysis to suggest which products are likely to perform well in the new market.
Some online sellers will sell a product category that becomes a global phenomenon overnight.
Sellers might notice unexpected demand for their products in random markets or regions, with seemingly no reasoning behind it.
So if your business is coming into one of these above scenarios, it could be a wise choice to take advantage of the situation and expand business into new markets.
Below, you will find some of the main steps to take in order to grow your business in new markets.
Running your online store, you likely have a good idea of who your customers are and the niche audience you do business with.
If you don’t, you need to get a good idea of your customer avatar before going global.
Essentially, your customer avatar encompasses the interests, values, and demographics of your ideal customer.
Here’s how you can create a customer avatar by answering the following questions:
This can be a crucial resource for your marketing strategy, sales efforts, and other business functions to keep your business on track and serve your customers’ interests.
Although it's not everything, your customer avatar is a good place to start and a place you can go back to make sure your business decisions are in line with your clientele.
Thus, this principle doesn’t change as you expand into new markets.
When you make this strategy decision to go global, you’ll need to redefine your customer avatar to incorporate the needs, interests, demographics, and preferences of your global customers. Plus, this step can also help you recognize the markets worth pursuing and which ones you can avoid.
For some ecommerce stores, this move won’t change their customer avatar too much compared to the one they’ve created for their local customers.
However, it’s important to take the time to research your new customer base and incorporate their preferences into your business to best serve them.
With this step complete, you’ll be in a good place to continue your expansion efforts with this baseline knowledge in mind.
As you grow your business by entering into new markets, automation will quickly become your new best friend.
Automation may seem like the point of conversation across many markets today, and ecommerce is no different.
Within the ecommerce space, automation is revolutionizing warehousing, order processing, customer service, and other aspects of running an online business in a way that helps merchants become more efficient and save on costs.
Let’s take a look at some of the main uses of automation for ecommerce stores:
Above all, automation will help take care of the menial, repetitive tasks that you or team members may be bogged down with.
Thus, this will free up valuable time for high-level planning and strategizing that will be required as you’re entering a new market.
Especially once you expand into new markets, your workload will grow rapidly, meaning automation will only become more valuable to your business as it continues to grow.
Even still, you’ll need to be diligent with your research into automation tools and investments.
Otherwise, you could spend a significant amount of capital on tools that end up being useless to your operations or purchase systems that overlap and make the other obsolete.
Thus, investing in automation for your ecommerce store can give you an edge over the competition and make your entire operations run more efficiently.
There are many aspects of the logistics and payments that must be organized to expand your business into new markets.
However, there is another side to these expansion efforts that also must be accounted for.
Considering your strategy when entering new markets is important, as it can serve as a solid foundation for the other components of your expansion.
On that note, for this strategy to be effective, brands need to establish an authoritative presence and a reputable reputation on a global scale.
There are many instances of brands that were successful in their home markets but failed on a global level.
Consider recipes that are popular in one region but not so much in another.
If this is not taken into account before attempting to expand, it could be disastrous for the entire strategy.
Additionally, until you actually start selling to global consumers, there is no reason for these buyers to have the trust and confidence in your brand that domestic customers have built.
Thus, you will likely need to invest in marketing that will help you:
With content marketing implemented, it will be a major aspect of your expansion efforts.
However, you’ll need to customize the writing, videos, and other media to be specific to the region you’re trying to enter.
It's a crucial step to take to ensure that your efforts are appreciated and recognized by these foreign customers, and we'll talk more about it below.
Another great way to ensure that your expansion efforts into new markets goes smoothly is to learn from the global names that are already operating in these regions.
When you’re entering new markets, you are not only competing against other global names in your niche, but you’re also coming up against the local names in the market as well.
If you do not take the time to research your potential competitors and learn from what they’ve done correctly so far, you are missing out on a large opportunity.
By learning from your peers, you can gain the same insights they’ve learned from their experience without having to invest the time and resources that they have.
As a result, you can skip a large part of unnecessary processes associated with entering a new market and largely follow in their footsteps.
Of course, you cannot take advantage of their private or protected trade secrets and should stick to what’s publicly available about your peers.
However, there is plenty of information out there that you can access to see how companies like yours have made their expansion efforts possible.
See what you can do better than them because, after all, you will be competing against them for market share.
As we briefly discussed above, you’ll need to adapt and customize your strategies to fit the needs of the markets you’re entering to enter new markets successfully.
Rather than thinking of global expansion on a broad scale, think of your expansion efforts as entering several individual markets.
So if you plan on entering multiple countries simultaneously, be sure not to combine them into one group while strategizing and continue to treat them as separate entities.
Thus, you may want to start separate social media pages for your brand that are tailored to specific markets.
With this, you’ll be able to direct all messaging, content, and language to the right group of consumers.
Plus, you’ll want to get a translation for your webpage if needed as you expand into new markets.
Don’t just assume that you can throw your existing web copy into Google translate and call it a day.
Adapting to each market goes beyond the words on the page–you’ll also need to shift your messaging, branding, and other cultural details in a way that resonates with foreign consumers.
This is why it’s so important to recognize the markets worth pursuing from the very beginning, because these are time-intensive steps that you’ll need to take in order to see a successful expansion.
As you can see from this guide, expanding your business into new markets is no easy feat. However, with the proper resources, preparation, and strategy, you can leverage the globalized economy to your advantage to sell more and grow your business into a global brand.
In many ways, expanding into new markets requires a good amount of capital.
And while there are many funding sources available to fuel ecommerce growth, few offer as many benefits and with so few downsides as asset-based financing.
Using this route, online sellers don’t need years of business performance to qualify.
Instead, asset-based lenders will analyze the products you sell and your future prospects based on these features.
This makes it a much more appealing financing option than other choices like bank loans or equity financing.
With Myos, online sellers don’t need to make a personal guarantee in order to be approved. This takes away the personal risk you face with other financing options.
Plus, we make funding decisions quickly, as we know the ecommerce space moves quickly and you need to act fast–especially when you’re looking to expand business into new markets.
With us you can enjoy the following benefits:
💰 Flexible Funding Range - Access funding options ranging from €10,000 to €2,500,000, providing a wide range of financial support.
💼 Simplified Application Process - Experience streamlined application procedures with minimal documentation requirements, saving you time and effort.
📈 No Business History Required - Qualify for funding without the need for extensive business history, reducing barriers to entry. Moreover, you won't be exposed to personal risk.
🤖 AI-driven Lending Decisions - Enjoy lending decisions based on advanced AI algorithms and future projections of your success. The focus is on the products you sell rather than your business's financial records, increasing your chances of approval.
Are you prepared to increase sales and broaden your customer base?
Get your non-binding offer today and unlock the opportunities for growth in your business!
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